UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 25, 2002
Commission File Number 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1914582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6820 LBJ FREEWAY, DALLAS, TEXAS 75240
(Address of principal executive offices)
(Zip Code)
(972) 980-9917
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No _____
Number of shares of common stock of registrant outstanding at
September 25, 2002: 96,865,910
BRINKER INTERNATIONAL, INC.
INDEX
Part I - Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets -
September 25, 2002 (Unaudited) and June 26, 2002 3
Consolidated Statements of Income
(Unaudited) - Thirteen-week periods ended
September 25, 2002 and September 26, 2001 4
Consolidated Statements of Cash Flows
(Unaudited) - Thirteen-week periods ended
September 25, 2002 and September 26, 2001 5
Notes to Consolidated
Financial Statements (Unaudited) 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 12
Item 4. Controls and Procedures 12
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
Certifications 17 - 19
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BRINKER INTERNATIONAL, INC.
Consolidated Balance Sheets
(In thousands, except per share amounts)
September 25, June 26,
2002 2002
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 10,992 $ 10,091
Accounts receivable 27,557 22,613
Inventories 24,037 25,190
Prepaid expenses and other 66,960 66,727
Income taxes receivable - 15,673
Deferred income taxes 749 1,660
Total current assets 130,295 141,954
Property and Equipment, at Cost:
Land 260,721 254,000
Buildings and leasehold improvements 1,123,954 1,091,434
Furniture and equipment 644,941 635,403
Construction-in-progress 70,025 57,015
2,099,641 2,037,852
Less accumulated depreciation and (702,696) (682,435)
amortization
Net property and equipment 1,396,945 1,355,417
Other Assets:
Goodwill 193,899 193,899
Other 95,682 92,066
Total other assets 289,581 285,965
Total assets $1,816,821 $1,783,336
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term debt $ 17,334 $ 17,292
Accounts payable 104,207 118,418
Accrued liabilities 139,689 166,510
Income taxes payable 25,521 -
Total current liabilities 286,751 302,220
Long-term debt, less current installments 439,246 426,679
Deferred income taxes 19,458 17,295
Other liabilities 68,146 60,046
Shareholders' Equity:
Common stock - 250,000,000 authorized shares;
$0.10 par value; 117,499,541 shares issued and
96,865,910 shares outstanding at September 25,
2002, and 117,500,054 shares issued and
97,440,391 shares outstanding at June 26, 2002 11,750 11,750
Additional paid-in capital 332,111 330,191
Retained earnings 999,705 954,701
1,343,566 1,296,642
Less:
Treasury stock, at cost (20,633,631 shares at
September 25, 2002 and 20,059,663 shares (337,107) (317,674)
at June 26, 2002)
Unearned compensation (3,239) (1,872)
Total shareholders' equity 1,003,220 977,096
Total liabilities and shareholders' equity $1,816,821 $1,783,336
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen-Week Periods Ended
September 25, September 26,
2002 2001
Revenues $ 773,892 $ 672,655
Operating Costs and Expenses:
Cost of sales 210,426 185,824
Restaurant expenses 423,606 366,820
Depreciation and amortization 37,157 28,186
General and administrative 32,545 27,559
Total operating costs and expenses 703,734 608,389
Operating income 70,158 64,266
Interest expense 3,971 3,784
Other, net (1,590) (213)
Income before provision for
income taxes 67,777 60,695
Provision for income taxes 22,773 21,061
Net income $ 45,004 $ 39,634
Basic net income per share $ 0.46 $ 0.40
Diluted net income per share $ 0.45 $ 0.39
Basic weighted average
shares outstanding 97,177 98,963
Diluted weighted average
shares outstanding 99,235 101,572
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen-Week Periods Ended
September 25, September 26,
2002 2001
Cash Flows from Operating Activities:
Net income $ 45,004 $ 39,634
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 37,157 28,186
Amortization of deferred costs 3,271 348
Deferred income taxes 3,074 2,844
Changes in assets and liabilities:
Receivables (5,066) 4,149
Inventories 1,153 1,263
Prepaid expenses and other 1,139 (519)
Other assets 5,086 5,467
Current income taxes 41,194 16,357
Accounts payable (14,211) (9,957)
Accrued liabilities (24,553) (8,551)
Other liabilities (488) 1,157
Net cash provided by operating activities 92,760 80,378
Cash Flows from Investing Activities:
Payments for property and equipment (79,989) (49,162)
Payments for purchases of restaurants - (6,580)
Investment in equity method investees - (12,250)
Net payments from (advances to) affiliates 122 (675)
Net cash used in investing activities (79,867) (68,667)
Cash Flows from Financing Activities:
Net borrowings on credit facilities 10,045 26,788
Proceeds from issuances of treasury stock 1,511 1,849
Purchases of treasury stock (23,548) (39,739)
Net cash used in financing activities (11,992) (11,102)
Net change in cash and cash equivalents 901 609
Cash and cash equivalents at beginning of period 10,091 13,312
Cash and cash equivalents at end of period $ 10,992 $ 13,921
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The consolidated financial statements of Brinker International, Inc.
and its wholly-owned subsidiaries (collectively, the "Company") as
of September 25, 2002 and June 26, 2002 and for the thirteen-week
periods ended September 25, 2002 and September 26, 2001, have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC") for interim financial
statements. The Company owns, operates, or franchises various
restaurant concepts under the names of Chili's Grill & Bar
("Chili's"), Romano's Macaroni Grill ("Macaroni Grill"), On The
Border Mexican Grill & Cantina ("On The Border"), Maggiano's Little
Italy ("Maggiano's"), Cozymel's Coastal Grill ("Cozymel's"), Corner
Bakery Cafe ("Corner Bakery"), and Big Bowl Asian Kitchen ("Big
Bowl"). In addition, the Company owns an approximately 40% interest
in the legal entities owning and developing Rockfish Seafood Grill
("Rockfish").
The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals and adjustments) which
are, in the opinion of management, necessary to fairly state the
interim operating results for the respective periods. However,
these operating results are not necessarily indicative of the
results expected for the full fiscal year. Certain information and
footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to SEC rules and regulations
for interim financial statements. The notes to the consolidated
financial statements (unaudited) should be read in conjunction with
the notes to the consolidated financial statements contained in the
June 26, 2002 Form 10-K. Company management believes that the
disclosures are sufficient for interim financial reporting purposes.
Certain prior year amounts in the accompanying consolidated
financial statements have been reclassified to conform with fiscal
2003 classifications. These reclassifications have no effect on the
Company's net income or financial position as previously reported.
2. Shareholders' Equity
Pursuant to the Company's stock repurchase plan, the Company
repurchased approximately 828,000 shares of its common stock for
$23.5 million during the first quarter of fiscal 2003, resulting in
a cumulative repurchase total under the current plan of
approximately 16.9 million shares of its common stock for $351.1
million. The Company's stock repurchase plan is used by the Company
to increase shareholder value, offset the dilutive effect of stock
option exercises, satisfy obligations under its savings plans, and
for other corporate purposes. The repurchased common stock is
reflected as a reduction of shareholders' equity.
3. Supplemental Cash Flow Information
Cash paid for interest and income taxes is as follows (in
thousands):
Sept. 25, Sept. 26,
2002 2001
Interest, net of amounts capitalized $ 664 $ 2,880
Income tax (refunds) payments, net (21,495) 1,860
Non-cash financing activities are as follows (in thousands):
Sept. 25, Sept. 26,
2002 2001
Restricted common stock issued, net of forfeitures $ 4,524 $ 2,354
Increase in fair value of interest rate swaps and debt 938 1,958
Decrease in fair value of forward rate agreements
included in other comprehensive income - 344
Increase in fair value of interest rate swaps on real
estate leasing facility 8,588 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table sets forth selected operating data as a
percentage of total revenues for the periods indicated. All
information is derived from the accompanying consolidated
statements of income.
13-Week Periods Ended
Sept. 25, Sept. 26,
2002 2001
Revenues 100.0 % 100.0 %
Operating Costs and Expenses:
Cost of sales 27.2 % 27.6 %
Restaurant expenses 54.7 % 54.5 %
Depreciation and amortization 4.8 % 4.2 %
General and administrative 4.2 % 4.1 %
Total operating costs and expenses 90.9 % 90.4 %
Operating income 9.1 % 9.6 %
Interest expense 0.5 % 0.6 %
Other, net (0.2)% 0.0 %
Income before provision for income taxes 8.8 % 9.0 %
Provision for income taxes 2.9 % 3.1 %
Net income 5.9 % 5.9 %
The following table details the number of restaurant openings
during the first quarter and total restaurants open at the end of
the first quarter.
First Quarter Total Open at End
Openings of First Quarter
Fiscal Fiscal Fiscal Fiscal
2003 2002 2003 2002
Chili's:
Company-owned 19 9 648 551
Franchised 2 6 193 213
Total 21 15 841 764
Macaroni
Grill:
Company-owned 2 3 179 162
Franchised - - 6 6
Total 2 3 185 168
On The Border:
Company-owned 1 2 112 104
Franchised 1 - 19 20
Total 2 2 131 124
Corner Bakery:
Company-owned 2 4 76 66
Franchised - - 2 2
Total 2 4 78 68
Cozymel's - - 16 14
Maggiano's - 1 20 15
Big Bowl 2 - 14 9
Rockfish Partnership 3 - 15 8
Grand Total 32 25 1,300 1,170
REVENUES
Revenues for the first quarter of fiscal 2003 increased to $773.9
million, 15.0% over the $672.7 million generated for the same
quarter of fiscal 2002. The increase was primarily attributable to
a net increase of 144 company-owned restaurants since September 27,
2001 and an increase in comparable store sales for the first
quarter of fiscal 2003 compared to the same quarter of fiscal 2002.
The Company increased its capacity (as measured in sales weeks) for
the first quarter of fiscal 2003 by 15.2% compared to the
respective prior year quarter. Comparable store sales increased
0.8% for the first quarter of fiscal 2003 as compared to the same
period of fiscal 2002. Menu prices in the aggregate increased 1.6%
in fiscal 2003 as compared to fiscal 2002.
COSTS AND EXPENSES (as a Percent of Revenues)
Cost of sales decreased for the first quarter of fiscal 2003 as
compared to the respective period of fiscal 2002 primarily due to
menu price increases and favorable commodity price variances for
meat, seafood and dairy, partially offset by unfavorable commodity
price variances for poultry and beverages.
Restaurant expenses increased for the first quarter of fiscal 2003
compared to the respective period of fiscal 2002 primarily due to
higher labor and health insurance costs. These increases were
partially offset by increased sales leverage and decreases in
utility costs.
Depreciation and amortization increased for the first quarter of
fiscal 2003 as compared to the respective period of fiscal 2002.
The increase resulted from new unit construction, ongoing remodel
costs, the acquisition of previously leased equipment and real
estate assets and restaurants acquired during fiscal 2002. These
increases were partially offset by increased sales leverage and a
declining depreciable asset base for older units.
General and administrative expenses increased for the first quarter
of fiscal 2003 compared to the respective period of fiscal 2002.
The increase was primarily due to increased labor and health
insurance costs.
Interest expense decreased for the first quarter of fiscal 2003
compared with the respective period of fiscal 2002. The decrease
was primarily due to a decrease in interest expense on the
revolving lines-of-credit resulting from a lower average
outstanding balance, lower interest rates on floating rate debt and
an increase in interest capitalization related to new restaurant
construction activity. These decreases were partially offset by
the amortization of debt issuance costs and debt discounts on the
Company's $431.7 million convertible debt.
Other, net decreased for the first quarter of fiscal 2003 as
compared to the respective period of fiscal 2002 due to an
approximately $2.2 million gain from insurance proceeds, partially
offset by increased equity losses related to the Company's share in
equity method investees.
INCOME TAXES
The Company's effective income tax rate decreased to 33.6% from
34.7% for the first quarter of fiscal 2003 as compared to the
respective period of fiscal 2002. The decrease is primarily due to
a decrease in the effective state income tax rate and a non-taxable
gain from insurance proceeds.
NET INCOME AND NET INCOME PER SHARE
Net income for the first quarter of fiscal 2003 increased 13.5%
compared to the same period of fiscal 2002. Diluted net income per
share increased for the first quarter of fiscal 2003 by 15.4%
compared to the same period of fiscal 2002. The increase in both
net income and diluted net income per share was primarily due to
increasing revenues driven by increases in sales weeks and
comparable store sales and decreases in cost of sales, partially
offset by increases in restaurant, depreciation and amortization,
and general and administrative expenses as a percent of revenues.
LIQUIDITY AND CAPITAL RESOURCES
The working capital deficit decreased from $160.3 million at June
26, 2002 to $156.5 million at September 25, 2002. Net cash
provided by operating activities increased to $92.8 million for the
first quarter of fiscal 2003 from $80.4 million during the same
period in fiscal 2002 due to increased profitability and the timing
of operational receipts and payments. The Company believes that
its various sources of capital, including availability under
existing credit facilities and cash flow from operating activities,
are adequate to finance operations as well as the repayment of
current debt obligations.
Long-term debt outstanding at September 25, 2002 consisted of the
following (in thousands):
Convertible debt $ 256,710
Senior notes 46,891
Credit facilities 74,200
Capital lease obligations 35,806
Mortgage loan obligations 42,973
456,580
Less current installments (17,334)
$ 439,246
The Company has credit facilities totaling $375.0 million. At
September 25, 2002, the Company had $300.8 million in available
funds from these facilities.
Capital expenditures consist of purchases of land for future
restaurant sites, new restaurants under construction, purchases of
new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures, net of amounts funded
under the respective equipment and real estate leasing facilities
during the first quarter of fiscal 2002, were $80.0 million for the
first quarter of fiscal 2003 compared to $49.2 million, for the
same period of fiscal 2002. The increase was due to an increase in
the number of new store openings and the elimination of the
equipment and real estate leasing facilities in the third quarter
of fiscal 2002. The Company estimates that its capital
expenditures during the second quarter of fiscal 2003 will
approximate $88.0 million. These capital expenditures will be
funded entirely from operations and existing credit facilities.
Pursuant to the Company's stock repurchase plan, approximately
828,000 shares of its common stock were repurchased for $23.5
million during the first quarter of fiscal 2003. As of September
25, 2002, approximately 16.9 million shares had been repurchased
under the current plan for $351.1 million. The Company repurchases
common stock to increase shareholder value, offset the dilutive
effect of stock option exercises, satisfy obligations under its
savings plans, and for other corporate purposes. The repurchased
common stock is reflected as a reduction of shareholders' equity.
The Company financed the repurchase of its common stock through a
combination of cash provided by operations and drawdowns on its
available credit facilities.
The Company is not aware of any other event or trend which would
potentially affect its liquidity. In the event such a trend
develops, the Company believes that there are sufficient funds
available under its lines-of-credit and from its strong internal
cash generating capabilities to adequately manage the expansion of
business.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the quantitative and
qualitative market risks of the Company since the prior reporting
period.
Item 4. CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the
participation of the Company's management, including its Chief
Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of its disclosure
controls and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that
the design and operation of these disclosure controls and
procedures were effective.
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
FORWARD-LOOKING STATEMENTS
The Company wishes to caution readers that the following important
factors, among others, could cause the actual results of the
Company to differ materially from those indicated by forward-
looking statements made in this report and from time to time in
news releases, reports, proxy statements, registration statements
and other written communications, as well as oral forward-looking
statements made from time to time by representatives of the
Company. Such forward-looking statements involve risks and
uncertainties that may cause the Company's or the restaurant
industry's actual results, level of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Factors that might
cause actual events or results to differ materially from those
indicated by these forward-looking statements may include matters
such as future economic performance, restaurant openings, operating
margins, the availability of acceptable real estate locations for
new restaurants, the sufficiency of the Company's cash balances and
cash generated from operating and financing activities for the
Company's future liquidity and capital resource needs, and other
matters, and are generally accompanied by words such as "believes,"
"anticipates," "estimates," "predicts," "expects" and similar
expressions that convey the uncertainty of future events or
outcomes. An expanded discussion of some of these risk factors
follows.
Competition may adversely affect the Company's operations and
financial results.
The restaurant business is highly competitive with respect to
price, service, restaurant location and food quality, and is often
affected by changes in consumer tastes, economic conditions,
population and traffic patterns. The Company competes within each
market with locally-owned restaurants as well as national and
regional restaurant chains, some of which operate more restaurants
and have greater financial resources and longer operating histories
than the Company. There is active competition for management
personnel and for attractive commercial real estate sites suitable
for restaurants. In addition, factors such as inflation, increased
food, labor and benefits costs, and difficulty in attracting hourly
employees may adversely affect the restaurant industry in general
and the Company's restaurants in particular.
The Company's sales volumes generally decrease in winter months.
The Company's sales volumes fluctuate seasonally, and are generally
higher in the summer months and lower in the winter months, which
may cause seasonal fluctuations in the Company's operating results.
Changes in governmental regulation may adversely affect the
Company's ability to open new restaurants and the Company's
existing and future operations.
Each of the Company's restaurants is subject to licensing and
regulation by alcoholic beverage control, health, sanitation,
safety and fire agencies in the state and/or municipality in which
the restaurant is located. The Company has not encountered any
difficulties or failures in obtaining the required licenses or
approvals that could delay or prevent the opening of a new
restaurant and although the Company does not, at this time,
anticipate any occurring in the future, there can be no assurance
that the Company will not experience material difficulties or
failures that could delay the opening of restaurants in the future.
The Company is subject to federal and state environmental
regulations, and although these have not had a material negative
effect on the Company's operations, there can be no assurance that
there will not be a material negative effect in the future. More
stringent and varied requirements of local and state governmental
bodies with respect to zoning, land use and environmental factors
could delay or prevent development of new restaurants in particular
locations. The Company is subject to the Fair Labor Standards Act,
which governs such matters as minimum wages, overtime and other
working conditions, along with the Americans With Disabilities Act,
family leave mandates and a variety of other laws enacted by the
states that govern these and other employment law matters. Although
the Company expects increases in payroll expenses as a result of
federal and state mandated increases in the minimum wage, and
although such increases are not expected to be material, there can
be no assurance that there will not be material increases in the
future. However, the Company's vendors may be affected by higher
minimum wage standards, which may result in increases in the price
of goods and services supplied to the Company.
Inflation may increase the Company's operating expenses.
The Company has not experienced a significant overall impact from
inflation. As operating expenses increase, the Company, to the
extent permitted by competition, recovers increased costs by
increasing menu prices, by reviewing, then implementing,
alternative products or processes, or by implementing other cost-
reduction procedures. There can be no assurance, however, that the
Company will be able to continue to recover increases in operating
expenses due to inflation in this manner.
Increased energy costs may adversely affect the Company's
profitability.
The Company's success depends in part on its ability to absorb
increases in utility costs. Various regions of the United States
in which the Company operates multiple restaurants, particularly
California, experienced significant increases in utility prices
during the 2001 fiscal year. If these increases should recur, they
will have an adverse effect on the Company's profitability.
If the Company is unable to meet its growth plan, the Company's
profitability in the future may be adversely affected.
The Company's ability to meet its growth plan is dependent upon,
among other things, its ability to identify available, suitable and
economically viable locations for new restaurants, obtain all
required governmental permits (including zoning approvals and
liquor licenses) on a timely basis, hire all necessary contractors
and subcontractors, and meet construction schedules. The costs
related to restaurant and concept development include purchases and
leases of land, buildings and equipment and facility and equipment
maintenance, repair and replacement. The labor and materials costs
involved vary geographically and are subject to general price
increases. As a result, future capital expenditure costs of
restaurant development may increase, reducing profitability. There
can be no assurance that the Company will be able to expand its
capacity in accordance with its growth objectives or that the new
restaurants and concepts opened or acquired will be profitable.
Unfavorable publicity relating to one or more of the Company's
restaurants in a particular brand may taint public perception of
the brand.
Multi-unit restaurant businesses can be adversely affected by
publicity resulting from poor food quality, illness or other health
concerns or operating issues stemming from one or a limited number
of restaurants. In particular, since the Company depends heavily
on the "Chili's" brand for a majority of its revenues, unfavorable
publicity relating to one or more Chili's restaurants could have a
material adverse effect on the Company's business, results of
operations and financial condition.
Other risk factors may adversely affect the Company's financial
performance.
Other risk factors that could cause the Company's actual results to
differ materially from those indicated in the forward-looking
statements include, without limitation, changes in economic
conditions, consumer perceptions of food safety, changes in
consumer tastes, governmental monetary policies, changes in
demographic trends, availability of employees, terrorist acts, and
weather and other acts of God.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99(1) Certification by Ronald A. McDougall, Chairman
of the Board and Chief Executive Officer of the
Registrant, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
99(2) Certification by Charles M. Sonsteby, Executive
Vice President and Chief Financial Officer of the
Registrant, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K
A current report on Form 8-K, dated September 24, 2002 was
filed with the Securities and Exchange Commission on September
24, 2002. This Form 8-K contained the statements under oath
of the Principal Executive Officer and Principal Financial
Officer issued in accordance with the Securities and Exchange
Commission's order issued June 27, 2002 requiring the filing
of sworn statements pursuant to Section 21(a)(1) of the
Securities Exchange Act of 1934.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BRINKER INTERNATIONAL, INC.
Date: November 8, 2002 By: /s/ Ronald A. McDougall
Ronald A. McDougall,
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: November 8, 2002 By: /s/ Charles M. Sonsteby
Charles M. Sonsteby,
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
CERTIFICATIONS
I, Ronald A. McDougall, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Brinker
International, Inc.;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report.
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Date: November 8, 2002 By: /s/ Ronald A. McDougall
Ronald A. McDougall,
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
I, Charles M. Sonsteby, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Brinker
International, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
made, in light of the circumstances under which such
statements were made, not misleading with respect to the
period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report.
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there
were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 8, 2002 By: /s/ Charles M. Sonsteby
Charles M. Sonsteby,
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 99(1)
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, the undersigned officer of
Brinker International, Inc. (the "Company"), hereby certifies
that the Company's Quarterly Report on Form 10-Q for the quarter
ended September 25, 2002 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the
Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of
the Company.
Date: November 8, 2002 By: /s/ Ronald A. McDougall
Ronald A. McDougall,
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 99(2)
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350, the undersigned officer of
Brinker International, Inc. (the "Company"), hereby certifies that
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 25, 2002 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the
Securities Exchange Act of 1934 and that the information contained
in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
Date: November 8, 2002 By: /s/ Charles M. Sonsteby
Charles M. Sonsteby,
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
